State v. Lincoln Trust Co.

• Decision Date: 14 June 1898
• Citation: 144 Mo. 562,46 S.W. 593
• Parties: STATE ex rel. CROW, Atty. Gen., v. LINCOLN TRUST CO. et al.
• Court: Missouri Supreme Court

46 S.W. 593

144 Mo. 562

STATE ex rel. CROW, Atty. Gen., v. LINCOLN TRUST CO. et al.

Supreme Court of Missouri.

June 14, 1898.

CORPORATIONS — CREATION OF NEW POWERS — ESTOPPEL FROM DENYING — CONSTRUCTION OF STATUTES.

1. Under Rev. St. 1889, § 2839, cl. 1, empowering trust corporations to receive moneys, and to allow such interest thereon as may be agreed, such corporations have neither express nor implied authority to receive money on general deposit, upon which no interest is allowed, to be paid out on demand.

2. The general powers to be exercised under Rev. St. 1889, § 2839, cl. 5, authorizing trust corporations to accept and execute trusts for married women in respect to their separate property, and "generally to have and exercise such powers as are usually had and exercised by trust companies," applies to trusts for married women only.

3. The legislature cannot, by recognizing powers which did not theretofore exist, ingraft, by implication, new powers on a corporation.

4. To estop the state from proceeding against a corporation for exceeding its authority, on the ground that subsequent legislation recognized the acts alleged to be ultra vires, such legislation must have been enacted in reference to such corporations.

In banc. Quo warranto proceedings, on relation of the attorney general, against the Lincoln Trust Company and others, to oust them of their franchises because of the exercise of powers and privileges not conferred upon them by law. Limited judgment of ouster granted.

E. C. Crow, Atty. Gen., and W. W. Graves, for relator. G. A. Finkelnburg, for respondent Union Trust Co. Stewart, Cunningham & Eliot, for respondent St. Louis Trust Co. Fisse & Kortjohn, Judson & Taussig, and Lubke & Muench, for respondent Lincoln Trust Co. Boyle, Priest & Lehmann and J. E. McKeighan, for respondent Mississippi Val. Trust Co.

BURGESS, J.

This is a quo warranto proceeding begun by the attorney general against the Lincoln Trust Company, the Union Trust Company of St. Louis, the St. Louis Trust Company, and the Mississippi Valley Trust Company (all of the city of St. Louis), to oust them of their franchises because of the exercise of powers and privileges not conferred upon them by law. The trust companies were organized and have been doing business in this state by virtue of article 11, c. 42, Rev. St. 1889, and acts amendatory thereof. The Lincoln Trust Company was organized and incorporated on the 12th day of April, 1894; the St. Louis Trust Company, on the 9th day of October, 1889; the Union Trust Company, on the 7th day of June, 1890, and the Mississippi Valley Trust Company, on the ____ day of October, 1890. The informations against all the companies are substantially the same, and, being practically the same case, the defenses are the same. They have therefore been argued and briefed together, as if but one case, and will be disposed of by us in the same way.

The unauthorized and unlawful acts complained of are: Receiving upon deposit, subject to check and draft at sight, sums of money ranging in amount from one dollar and upwards; and, through their officers and agents, opening regular bank accounts, according to the customs and usages of regularly incorporated banks in this state, with whomsoever of the public desired to do a banking business with them; and buying and selling exchange on other banks and bankers in this and other states; and otherwise, by checks and drafts, and other kinds of negotiable paper usually dealt in and handled by regularly incorporated banks and banking institutions under the laws of the state of Missouri, carrying on, through channels of commercial business, such a general and regular business as is carried on, under and by virtue of the laws of this state, by the banks incorporated under the banking laws of Missouri. The respondents, in their answers, aver that they were duly and regularly organized and incorporated as trust companies under and in pursuance of the statutes of the state of Missouri relating to trust companies, to wit, article 11 of chapter 42 of the Revised Statutes of 1889 of the State of Missouri, and the act amendatory thereof, approved April 18, 1891, contained in the Session Acts of that year, at page 99 thereof, and that, being so organized and incorporated, they thereby became, by virtue of the said statutes, invested, and have ever since been and are now invested, with all the powers, privileges, rights, and franchises conferred by the said statutes, and all subsequent statutes amendatory thereof and supplementary thereto. The answer then admits that since their respective organizations they have accepted and received, and do still accept and receive, deposits of money of the following general classes: First. Deposits to be held for a specified time, and to bear a specified rate of interest. Second. Deposits to be held in trust, and to be returned to the depositor, or to be invested in some particular manner for accumulation, and to be returned, with the accumulation, to the depositor; and indemnity deposits. Third. Savings deposits, from one dollar upward, under specific regulations, upon which they pay interest at the rate of 4 per cent. per annum. Fourth. General deposits, subject to check or demand, upon which they pay interest at the rate of 2 per cent. per annum upon all daily balances above $200. Respondents justify their right to do this character of business by the terms of the statute, the interpretation of it by subsequent legislatures, by usage and custom, and by the uniform practice of trust companies with respect to such matters. The answer then avers that in 1887 the legislature amended the trust company statute by adding paragraphs 8 and 9 to the enumeration of the powers of such companies; that at the same session it had under consideration an act concerning mutual savings societies, which was passed and approved March 31, 1887; that section 12 of this act provided that mutual savings societies might keep on hand an available cash fund, not exceeding 25 per cent. of their total assets; that it further provided that this cash fund, together with the current receipts over the payments, might be kept on deposit with any trust company organized under the laws of Missouri; that this act of the legislature recognized, construed, and affirmed the right of trust companies, under the laws of this state, to receive deposits of money, and to hold them subject to the checks of the depositors. The answers further show that at the session of the legislature of 1891, when the assembly was again considering and amending the statutes relating to the powers of trust companies, it also again considered an amendment to the law authorizing the formation of mutual savings and safe-deposit institutions; that it again provided that such corporations shall keep "an available cash fund of not less than fifteen per cent of the whole amount of its assets and the same or any part thereof together with the current receipts over the payments, may be kept * * * on deposit payable on demand * * * with * * * any trust company incorporated under the laws of this state." The answer contends that this act, by express and necessary reference, concedes and recognizes the right of trust companies to receive money on deposit, subject to be drawn against by check, or sight or demand draft. The answer again contends that the legislature conceded and recognized the right of trust companies, under the powers granted by the statutes of this state, to receive deposits of money subject to check or sight or time draft, when by an amendment to sections 2760, 2761, Rev. St. 1889, it ordained that "no president, director, manager, cashier or other officer or agent of any * * * trust company * * * organized and doing business under * * * any laws of this state shall receive or assent to the reception of deposits * * * by such trust company * * * after he shall have knowledge of the fact, that it is insolvent or in failing circumstances," and providing that "in all suits brought for the recovery of the amount of any deposits received or debts so created all officers, agents or managers of any such * * * trust company * * * charged with having so assented to the reception of such deposit * * * may be joined as defendants or proceeded against severally, and the fact that such * * * trust company * * * was so insolvent or in failing circumstances at the time of the reception of the deposit charged to have been so received * * * shall be prima facie evidence of such knowledge and assent to such deposit. * * *" The answer further contends that the legislature construed and recognized the statutes of this state as having conferred upon trust companies the right to accept deposits of money, and hold them subject to the order of the depositor, on such terms as might be mutually agreeable, and confirmed this right by repealing section 3851, Rev. St. 1889, and enacting in lieu thereof a new section (Acts 1895, p. 158), which provided that "if the president, vice-president, secretary, treasurer, director, or other agent, of any * * * trust company or institution doing business in this state, shall receive or assent to the reception of any deposit of money or other valuable thing, in such * * * trust company or institution after he shall have had knowledge of the fact that such * * * trust company or institution is insolvent or in failing circumstances, he shall be deemed guilty of larceny."

The answer further represents that the legislature, by an act passed in March, 1895 (Acts 1895, p. 97), recognized the right of trust companies to receive deposits of money upon such terms, and subject to such conditions, as the depositors and trust companies might agree to, and so construed the statute by providing that the secretary of state shall annually inspect "every * * * trust company organized under the laws of the state of Missouri which receives deposits: provided, however, that such...